Lawmakers want to allow PA universities to leave state system

By Andrew Staub | PA Independent

HARRISBURG, Pa. – It’s time to adapt.

That’s the basic message two state senators sent Tuesday as they unveiled legislation that would allow successful schools from the Pennsylvania State System of Higher Education to buy their way out and become state-related institutions.

The proposal would give the schools greater flexibility as declining enrollment numbers and financial challenges threaten the sustainability of the 14-member state system, said state Sens. Tommy Tomlinson and Andy Dinniman, a Democrat from Chester County.

Doing nothing could jeopardize some of the institutions, said Tomlinson, a Bucks County Republican.

“I think we have a train wreck coming financially. I think we have to do something about that,” said Tomlinson. He said he doesn’t want to see any of the schools close.

Under the legislation, a school could become a state-related university if it has more than 7,000 students, an unqualified audit opinion for three years and can compensate Pennsylvania for the depreciated value of its property. The schools would still have to contribute to pension obligations.

Schools that leave the state system would have greater flexibility outside of a centralized bureaucracy, Tomlinson said, but would also pump millions back into the state system by buying their buildings and land from the state. They would also handle capital projects, leaving more money for the institutions left in the state system, Tomlinson said.

PASSHE Chancellor Frank Brogan issued a statement saying the state system will review the bill. He expressed concern that the legislation would increase tuition and fees.

“This would create an added burden for students and their families. Every university that leaves the state system could close another door to affordable, quality public higher education,” he said.

The Association of Pennsylvania State College and University Faculties warned students at schools that leave the system could see tuition jump from about $6,600 a year to more than $17,000, such as the case at the state-related Penn State University.

Tomlinson acknowledged that tuition would likely increase – but not to such extreme levels. He anticipated $500 to $1,000 jumps a semester.

Increases are in the forecast. Brogan has said during budget hearings the state system would have to hike tuition by 3 percent as it faces a possible $60 million deficit next fiscal year.

Dinniman, though, believes PASSHE would actually have to hike tuition by 7 percent or cut services to cover the gap. With the state’s focus on education centered on other areas, it’s unlikely the state would ride to the rescue with more money, as Brogan has requested.

“It makes sure that we confront fiscal reality,” Dinniman said while making his case for the bill.

Both Dinniman and Tomlinson have ties to West Chester University. Dinniman was a professor there and Tomlinson graduated from the school.

With an enrollment of 15,400 and the highest average operating margin of all 14 schools over the past five years, West Chester seems a prime candidate to join Penn State, the University of Pittsburgh, Temple University and Lincoln University as state-related schools.

Eli Silberman, a member of the West Chester University Council of Trustees, said the current system constrains everything from salaries to research compensation to the hiring of university presidents.

West Chester trustees have been thinking about breaking away for “quite some time,” Silberman said, indicating the passage of the legislation would open the door for the school to seriously explore the possibility.

Though leaving isn’t a lock, “all indications are that we’re going in that direction, Silberman said.

While West Chester might be in a position to move, the tiny Cheyney has had a negative average operating margin over the past five years. It joined Clarion, East Stroudsburg, Edinboro, Mansfield, Millersville, Shippensburg and Slippery Rock as universities that had negative operating margins in 2013, according to data provided by the senators.

“It’s no secret that PASSHE is facing some enormous financial challenges,” said Christopher Franklin, who serves on the PASSHE Board of Governors and West Chester University’s Council of Trustees. “Those challenges will not disappear in the coming years without a very large infusion of funds or a fairly dramatic restructuring of the state system.”

Dinniman warned that PASSHE is a “house of cards” in its current form and sees the bipartisan legislation as a catalyst to discuss the future of higher education.

“We live in an era unlike any other based on the rapidity of change that surrounds us,” he said. “All institutions have to change. It’s about time we have that discussion in terms of the state system.”

Andrew Staub is a reporter for PA Independent and can be reached at Andrew@PAIndependent.com. Follow @PAIndependent on Twitter for more.

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